A rush for black gold in the Gulf
August 20, 2009
Major new offshore drilling for oil and natural gas in the Gulf of Mexico will soon be a reality. The big question is whether Americans will be part of it. Brazil, China, India, Norway, Spain and Russia have all signed agreements with Cuba and the Bahamas to initiate exploration and production in the Gulf of Mexico within the next two years. So the prospect of seeing Russian oil rigs 45 miles off the Florida Keys -- where American oil companies are now forbidden to drill -- is a very real possibility.
The U.S. Geological Survey estimates that the eastern Gulf region contains 3 billion barrels of oil and more than 11 trillion cubic feet of natural gas. Last summer, former President George W. Bush lifted the executive branch moratorium his father signed in 1990 on new drilling in 85 percent of America's territorial waters. The Democratic Congress then wisely let the congressional ban expire as well. So the only thing keeping U.S. firms from drilling off our own continental shelf is President Barack Obama and his secretary of the interior, Ken Salazar, who is slow-walking the approval process that must be cleared before the work can begin. Meanwhile, foreign nations are jockeying for the best spots. The Obama administration, incredibly enough, is giving Brazil a $2 billion loan from U.S. taxpayers to finance that nation's development of its own off-shore energy resources in the Atlantic.
According to the American Petroleum Institute, the development of America's coastal oil and gas resources would generate more than $1.3 trillion in new government revenue and 160,000 high-paying jobs over the next two decades. Senators Lisa Murkowski, R-Ark., and Mary Landrieu, D-La., are bipartisan co-sponsors of a bill that provides coastal states such as Florida their fair share of revenues produced by off-shore drilling and production. The same thing should be done for states on the East and West coasts. California Gov. Arnold Schwarzenegger and the state's lawmakers hope to tap deposits off Santa Barbara to generate billions in royalties, and Virginia's front-running gubernatorial candidate Bob McDonnell has made drilling 50 miles off that state's coast a key component of his energy plan.
Many environmental objections to deepwater drilling have been overcome. For example, 4-D seismic surveys provide pinpoint accuracy for well location. New technology also enables one drilling platform to reach deposits 40 miles away in water up to 10,000 feet deep (note the same technology could help other nations drill just outside our coastal limits while tapping into resources inside the boundary). According to the U.S. Minerals Management Service, less than 0.0001 percent of the 1.4 billion barrels of oil pumped offshore since 1980 has been spilled -- a remarkable safety record and a tribute to American energy ingenuity.
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